Cost of Farm Subsidies Cited as Trade Issue

In an effort to persuade West European countries to end farm subsidies, the Bush Administration has begun citing new estimates of the high costs of agricultural support, which is now put at $200 billion for both the United States and the European Community, nearly 10 times higher than was estimated earlier.

The United States trade representative, Carla A. Hills, said today that the revised numbers, put together recently by the staff of the Organization for Economic Cooperation and Development in Paris, added urgency to the need to agree on an agriculture trade liberalization pact at the so-called Uruguay Round of trade talks currently being held in Geneva.

The new study takes into account the cost of farm subsidies in both the community and the United States and examines policies on rural development, processing, marketing, inspection services and the impact of price and income support. Level Down from 1987

The O.E.C.D. breakdown shows that in 1988 the cost of farm support was $119.4 billion in the community and $73.8 billion in the United States. Both calculations were down slightly from 1987, when the cost of support in Europe was put at $123.9 billion and in the United States at $86.1 billion.

National and international organizations have tried for years to establish reliable estimates of the cost of farm support. The O.E.C.D. study, which was completed by its agricultural trade committee last May, is believed to be the most comprehensive.

Previous estimates by both the European Community and the United States Agriculture Department had generally placed spending in the range of $25 to $35 billion a year. The new study seeks to incorporate all agricultural outlays whereas earlier numbers focused primarily on specific subsidies like price supports and loan programs.

An error has occurred. Please try again later.

You are already subscribed to this email.

''The cost is astronomically high,'' Mrs. Hills told reporters here today in preparation for a negotiating trip next week to Western Europe during which subsidies are expected to be a major issue. Competition a Factor

She added that the costs were pushed even higher because of subsidized export competition.

''Even here, when we talk to members of the farm community about export enhancement,'' she said, referring to subsidies, ''it's always that the community provides subsidies for their sales and we have to meet the competition.''

The United States and the West Europeans last April concluded a framework agreement for the trade negotiations in which both sides said they would accept a ''progressive and substantial reduction'' of subsidies. But there has been little progress since.

The Uruguay Round, the eighth and most complex postwar effort to establish freer trade under the General Agreement on Tariffs and Trade, is being conducted by 108 nations and is scheduled to end next year.

Besides cutting farm subsidies, negotiators are trying to liberalize trade in services, like insurance and tourism, establish greater protection for copyrights, trademarks and other intellectual property, and chart a course for eventual freer trade in textiles.

We are continually improving the quality of our text archives. Please send feedback, error reports,
and suggestions to archive_feedback@nytimes.com.

A version of this article appears in print on September 8, 1989, on Page D00006 of the National edition with the headline: Cost of Farm Subsidies Cited as Trade Issue. Order Reprints|Today's Paper|Subscribe